Uzbekistan secures $800 million loan from the World Bank

The World Bank’s Board of Executive Directors has approved an $800 million concessional financing package to support Uzbekistan’s ongoing reforms aimed at reducing poverty, creating jobs, developing the private sector, and strengthening competition in strategically important sectors of the economy. This was reported by the World Bank’s office in Uzbekistan.

According to the statement, the government policy measures supported under this operation are designed to mitigate the impact of higher energy tariffs on low-income households, protect women from harassment and violence in the workplace, expand access to social services for vulnerable groups, enhance competition in telecommunications, agriculture, and energy sectors, and promote Uzbekistan’s integration into international trade.

To implement the above-mentioned reforms, the World Bank will provide $800 million in concessional loans. These funds will be extended to the government at low interest rates and with long-term repayment terms. Such lending conditions are more favorable than those available in international financial markets, allowing Uzbekistan to reduce its debt servicing costs and direct the saved budget resources toward addressing priority socio-economic issues.

The World Bank’s support will assist the government in implementing urgent policy measures in several strategically important areas, including:

• Social protection: Increasing annual one-time cash assistance for low-income families from 270,000 soums to 1 million soums to compensate for higher electricity, heating, and gas tariffs;
• Women’s economic empowerment: Developing a legal and regulatory framework to protect women from sexual harassment and violence in the workplace; prohibiting employers from refusing to hire, reducing salaries, or dismissing women due to pregnancy or having children;
•  Access to social services: Creating conditions for the development of a market for social services to vulnerable groups of the population through accredited private and non-governmental providers;
• State enterprise reform: Establishing the Uzbekistan National Investment Fund to improve the management and privatization of state-owned enterprises; creating an independent telecommunications regulator to limit the dominance of state companies in broadband internet and mobile communication markets, and attracting private investment;
• Agriculture: Introducing an insurance system to protect local agricultural producers from risks; continuing reforms in the cotton industry, including introducing a flexible cotton pricing mechanism and enabling textile enterprises to purchase cotton directly from farms;
• Trade liberalization: Accelerating Uzbekistan’s accession to the WTO and simplifying export procedures; expanding international trade by abolishing export permits for certain goods and revoking exclusive rights granted to individual companies in the energy, oil and gas, chemical, and agricultural sectors;
• Energy sector: Expanding private investor participation; opening the electricity distribution market; and granting independent renewable energy producers the right to sell electricity directly to consumers;
• Energy efficiency: Introducing additional incentives to reduce greenhouse gas emissions and improve energy efficiency in high-consumption industries; establishing a National Energy Efficiency Agency to attract private investment in energy-saving projects; promoting solar energy and improving building energy performance;
• Green public procurement: Introducing environmental criteria into the public procurement system to prioritize the purchase of eco-friendly goods and services using budget funds.

It is worth noting that on September 17 of this year, President of Uzbekistan Shavkat Mirziyoyev received Luis Felipe Lopez-Calva, the World Bank’s Global Director, in Namangan.